A premium which is paid to an employee for an event in the private life of the employee, can qualify as salary on which social security contributions are due

According to the Belgian Supreme Court, a benefit qualifies as salary on which social security contributions are due from the moment that the benefit is paid automatically to all employees which are entitled to it further to a legal commitment of the employer. The fact that the benefit is paid at the occasion of an event in the private life of the employee is of no importance.

Within a company there was a written policy, according to which the employer had to pay a special premium of 500 EUR directly on the bank-account of the children of its employees on their 12th birthday, as a special birthday gift.

According to the employer this was a gift to the children and hence no salary for the employee on which social security contributions are due. The social security administration on the other hand, did qualify the premium as salary subject to social security contributions.

According to the Belgian Supreme Court, the premium was indeed salary, because (i) the employees were legally entitled to this benefit, based upon the internal policy, (ii) the premium was only paid because the employee was employed by the company. The fact that the premium was not paid to the employee but to its child directly, is of no importance.

To remember?

A premium paid by the employer to an employee for an event in the private life of the employee can only be exempt from social security contributions when the employer has no obligation whatsoever to pay the premium. In that case, the premium is a gift and no salary on which social security contributions must be paid.

Please find here the full French version of this news. Should you wish any further explanation, do not hesitate to contact us.